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<h1>Homeowners Insurance Frequently Asked Questions</h1>	
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<h2><strong>My estimate says I should get paid $2500 but my check isn't for the whole amount. What does "holdback" amount mean?</strong></h2>
<p>The hold-back amount is repair or replacement minus actual cash value. According to 
your contract, your company will pay no more than actual cash value of the damage until 
actual repair or replacement is complete. At that time, the insurance company will issue 
the second check to cover your loss. This loss settlement provision can be found under 
Section 1--Conditions of your homeowner policy. </p>
<h2><strong>I borrowed my neighbor's lawn mower. While using it I struck an object and damaged the mower. Will my homeowners policy help pay for it? </strong></h2>
<p>The liability coverage section of most homeowner's policies excludes coverage for 
property not owned by you, but in your "care, custody, or control." However, a provision 
in the Additional Coverage's section of the contract does give back limited coverages 
specifically for "damage to property of others." Generally, the amount of coverage is 
provided at a $500 or $1,000 limit. In addition, there is no deductible applied to this type 
of claim. </p>
<h2><strong>I rent my apartment. Is it necessary to have renter's insurance? </strong></h2>
<p>You should consider purchasing a renter's policy, which will cover the contents of your 
apartment. If you have valuable items such as jewelry, antiques or artwork, it may be 
advisable to have these items scheduled separately. </p>
<h2><strong>I am shopping for a house. What do I need to know about homeowner's insurance before I buy? </strong></h2>
<p>There are two parts to a typical homeowner's policy: </p>
<ol>
<li>Contents converge protects your personal items and the contents of your home. </li>
<li>Dwelling coverage protects the structure and most cases any unattached buildings. </li>
</ol>
<h2><strong>I recently installed smoke alarms on all levels of my home. Am I entitled to a discount on my homeowner's policy? </strong></h2>
<p>Most insurance carriers offer discounts for several features, one of which may include 
smoke alarms. The amount of the reduction varies from company to company. You may 
be able to get an insurance discount and have a safe home for your family as well. </p>
<h2><strong>Are there any types of discounts required in New Mexico on a Homeowner's policy? </strong></h2>
<p>New Mexico requires a 10% discount be provided when you have an operable electronic 
burglar alarm installed in your home. A 5% discount is also available when you have 
wrought iron bars on all doors and windows. </p>
<h2><strong>What is Homeowner's Insurance? </strong></h2>
<p>Homeowner's insurance is coverage for your home, contents, and your personal liability. 
A homeowner's policy usually covers:</p> 
<ol>
<li>property damage to your home and other detached buildings. </li>
<li>contents and personal belongings. </li>
<li>reimbursement for your additional cost to live at another place if your home is damaged 
and uninhabitable. </li>
<li>personal liability to protect you from a claim or lawsuit if you are responsible for 
injuries to others or damage to their property. </li>
</ol>
<h2><strong>As a result of rain and hail storm, we have a hole in our roof. If I get the roof 
patched before the insurance adjuster comes to see it, will the insurance 
company still pay for the actual repair of the roof? </strong></h2>
<p>Yes. It is your responsibility to protect the roof from further damage until the insurance 
adjuster can determine the extent of the loss. In order to get reimbursed for these 
expenses, you should keep receipts to submit to the insurance company. </p>
<h2><strong>What is usually not covered? </strong></h2>
<p>Most homeowner's policies will not cover vehicles or vehicle stereo equipment, or losses 
from natural disaster such as flooding, earthquakes or nuclear accidents. You can usually 
buy coverage for these things in a separate policy. </p>
<h2><strong>What Is The Difference Between Actual Cash Value and Coverage and Replacement Cost Coverage? </strong></h2>
<p>New Mexico requires your homeowner's policy to provide replacement cost coverage for 
your dwelling up to the policy limit. Your contents and personal belongings are settled at 
their actual cash value at the time of the loss, unless your purchase replacement cost 
coverage for your contents. This is replacement cost less deduction for depreciation. 
Some policies will offer replacement cost coverage, which will repair or replace personal 
property at current prices with no reduction for depreciation. You can usually upgrade 
your policy to replacement for an additional charge. </p>
<h2><strong>If my home were destroyed by a disaster, would my homeowner's policy cover my furniture and belongings? </strong></h2>
<p>Yes. However, if you want to protect the contents of your home at full value, you must 
purchase replacement cost coverage. Making an inventory of your property prior to a 
loss is strongly suggested. Using photographs and a videotape can be helpful. If you 
have any unique items, you may choose to insure these items specifically. Policies will 
normally cover content at actual cash value; however, most companies have a 
replacement cost option. Theft following a disaster will impose low monetary limits on 
money, jewelry, furs, silverware, guns, etc. Higher limits may be purchased. To make 
sure you have adequate coverage, we suggest you review your policy with your agent. </p>
<p>Reduce any time period applicable to a pre-existing condition-waiting period for time 
covered by qualifying previous coverage. The coverage must have been continuous for at 
least sixty-three days before the effective date of the new coverage. </p>
<h2><strong>Do you have information on Flood Insurance? </strong></h2>
<p>Floods can happen at anytime and anywhere. But the Flood Disaster Protection Act of 
1973 helps ensure that you will be protected from financial losses caused by flooding. 
Backed by the U.S Government, flood insurance is available to residents in more than 
18,000 communities across America that participates in the National Flood Insurance 
Program (NFIP). </p>
<p>At a time when flooding causes more than $2 billion in property damage each year, you 
cannot afford to think that it will never happen to you. It can happen, and often when it's 
least expected. You may contact the Flood Insurance Plan at 1-800-427-2354. </p>
<p>Losses due to flooding are not covered under most homeowner's policies. You can, 
however, protect your home and its contents through the NFIP, if your community is 
participating in the program. </p>
<p>To become eligible, a community first enters the emergency phase of the NFIP by 
adopting preliminary actions to reduce the flood threat. Everyone in that community can 
then apply for limited amounts of flood insurance at federally subsidized rates. Much 
higher levels of insurance become available when a community qualifies for the regular 
program phase. This occurs after the Federal Emergency Management Agency (FEMA) 
has conducted a detailed flood study, and local officials have enacted more stringent 
measures to safeguard life and property from future flooding. To find out more about 
flood insurance and whether your community is eligible, ask any licensed 
property/casualty agent or broker-the same person who sells you your home and auto 
policies. Flood insurance coverage is an asset to you as a borrower. It reimburses you for 
financial losses from flood damage. With one annual premium, you have peace of mind 
that your losses will be covered. </p>
<h2><strong>When does the policy take effect? </strong></h2>
<p>Most flood policies require a 30-day waiting period between the time the policy is 
purchased and the coverage is in force. </p>
<h2><strong>How do I know when Flood Insurance Coverage should be purchased?</strong></h2>
<p>Flood insurance is required by law for all federally insured or regulated lenders for 
mortgages and other loans on buildings and manufactured (mobile) homes when located 
in special flood hazard areas. However, you may opt to purchase flood insurance for 
your own protection even if law does not require it. </p>
<h2><strong>Will I be reimbursed for taking preventive measures against flood? </strong></h2>
<p>Preventive measures to reduce flood damage to an insured building are often 
reimbursable. Policyholders may have a limited amount of coverage to recover the cost 
of removing insured contents from a building that has been declared in imminent danger 
of flooding by community officials. </p>
<h2><strong>Do I need flood insurance? What is covered, and where can I buy it? </strong></h2>
<p>Present day homeowners insurance policies do not include loss due to flood-related water 
damage. In fact, most contracts specifically exclude coverage for floods or rising 
waters. Insurance companies have not looked favorably on insuring against loss due to 
floods because it is extremely difficult to predict when the loss will occur and how big 
the loss will be. Premiums to cover such an unpredictable loss could be very high. During 
a period of drought, people are unwilling to pay significantly more for homeowners 
insurance to cover loss due to floods. </p>
<p>Federal flood insurance is available in cities, counties, or townships that participate in the 
National Flood Insurance Program (NFIP) and can be purchased through any licensed 
property/casualty insurance agent. Depending on the level of protection purchased, 
coverage can include: </p>
<ol>
<li>Structural elements (walls, floors, equipment) </li>
<li>Content (furniture, appliances, carpeting) </li>
<li>Personal items (clothing, stereos, televisions) </li>
<li>Basement cleanup expenses and items such as furnaces, water heaters, elevators </li>
<li>Seepage is not covered in most cases </li>
</ol>
<p>If you are contemplating purchasing flood protection, it is important to know that there is 
a 30-day waiting period from the time of application. 
You should review your policy with your agent and talk about the type of water damage 
coverage they presently have and what coverage, including federal flood insurance, may 
be available.</p> 		
      <h2>Why should I buy homeowners insurance? </h2>
      <ol>
        <li><em>Home Owners:</em> Protect both your house and personal property. 
        </li><li><em>Tenants of Rental Properties:</em> Protect your personal property. 
        </li><li><em>All parties:</em> Protection against liability for accidents
          that injure other people or damage their property.</li>
      </ol>
      <h2><strong>Are deductibles required and if so, what are they? </strong></h2>
      <p> Yes, most homeowners forms contain deductible provisions applicable
        to losses occurring under Section I (Section I losses include (a) dwelling,
        (b) appurtenant structure, (c) unscheduled personal property, and (d)
        additional living expenses). The type and amount of deductible varies
        by company. Deductible provisions do not apply to Section II losses (Section
        II losses include personal liability [bodily injury and property damage]
        and medical payments to others). Some companies offer an optional deductible
        applicable only to wind or hail losses. Most offer higher deductible
        options such as $500 or $1,000 at a reduced premium. </p>
      <h2><strong>What property and perils are excluded from most homeowner policies? </strong></h2>
      <p> Most homeowner policies provide coverage that does not apply to animals,
        birds, fish, automobiles and business property; for loss or damage caused
        by flood, surface water, water which backs up through sewers or drains,
        earth movement, nuclear damage, war, etc. Section II coverages (personal
        liability and medical payments) do not apply to the operation, ownership,
        use, etc., of any aircraft, automobile, recreational motor vehicle, water
        craft powered by more than 50 horsepower motor; bodily injury or physical
        damage caused by an intentional act of the insured. It must be noted
        that these are a mere sample of property and perils not covered. A complete
        review of your policy is the only way to determine what property is covered
        and what perils are insured against. Also, there are specific limits
        of coverage on property insured under the homeowner&#8217;s policy such
        as money, securities, water craft, theft of jewelry, silverware, and/or
        guns. </p>
      <h2><strong>My house was completely destroyed by fire. I'm trying to collect
          on my personal property that I had in the house, but the insurance
          company is telling me I need an inventory. Can they do that? </strong></h2>
      <p> Yes. Whether your policy pays for the replacement or just the actual
        cash value, the company is only obligated to pay for personal property
        that you can show you owned at the time of loss. It is a very good idea
        to keep an up to date inventory in a secure place. Also, to help you
        remember what you had, it is helpful to take pictures of each room and
        keep them with your inventory. </p>
      <h2><strong>Our sump pump failed and the insurance company is denying our
          claim because the water backed up through our sewers. Can they do this? </strong></h2>
      <p> Most insurance policies exclude water damage from water that backs
        up through sewers or drains. You may wish to contact your agent and inquire
        about putting an endorsement on your policy, which would cover sewer
        back up. </p>
      <h2><strong>All my CDs and tapes were recently stolen from my vehicle.
          My insurance company advised there is no coverage for these items in
          either my auto insurance or my homeowner&#8217;s insurance policy.
          Is this true?</strong></h2>
      <p> Almost all auto and homeowners policies exclude coverage for any losses
        of tapes, disks and other sound transmitting or receiving equipment used
        in an automobile. Some insurance companies however, will provide coverage
        for these items for an additional premium. Check with your agent to determine
        if coverage can be purchased for the stereo, tapes and disks used in
        your auto. </p>
      <h2><strong>My boat was stolen and now my insurance company will not pay
          the claim on my homeowner&#8217;s policy. Can they deny my claim? </strong></h2>
      <p> Theft to watercraft, including furnishings, equipment and outboard
        motors, are typically excluded if the theft occurs outside your residential
        premises. To adequately cover your boat and its accessories, you should
        contact your agent regarding a separate policy covering the boat. </p>
      <h2><strong>I have specifically insured antique items listed on my homeowner&#8217;s
          policy. If I have a total loss, would the insurance company pay me
          the insured value? </strong></h2>
      <p> Your insurance company would first confirm the value of the items with
        one or more independent antique dealers. You should then be paid a dollar
        value based on the dealer(s) estimate of the worth of the antique items.
        If you disagree with the settlement offered by your insurer, then you
        can follow the dispute resolution process outlined in your policy. There
        is a simpler way: Get appraisals and have your agent establish the stated
        values in the policy. You should also keep your appraisals up-to-date. </p>
      <h2><strong>During a storm, a tree from my neighbor&#8217;s yard fell and
          destroyed my fence. Does my homeowner&#8217;s policy pay for the damage
          or does my neighbor&#8217;s policy? </strong></h2>
      <p> Generally, your own policy should cover the loss. Your insurance company
        may be able to recover the amount it pays you for the loss and your deductible
        from the homeowners insurance that your neighbor may have if the loss
        occurred as a result of your neighbor&#8217;s negligence. </p>
      <h2><strong>Recent rainstorms have flooded and damaged my basement. Is
          there any coverage under my homeowner&#8217;s policy? </strong></h2>
      <p> Flood coverage is generally excluded on the basic homeowners policy.
        However, some homeowners policies provide coverage for backup of sewers
        and drains that cause flooding in your basement. This coverage can be
        purchased for a nominal premium. You should check with your agent to
        see if this coverage is provided and how much it costs. </p>
      <p>If, however, you live in a flood-prone area, you should consider 
        
        
  &#8211; and may be required by your lending institution
        
        
  &#8211; to purchase a flood insurance policy. Your agent should be able to
  inform you about the Federal Flood Insurance Plan and the exclusions and limitations
  of coverage in this policy. </p>
      <h2><strong>When can an insurance company cancel my homeowners coverage
          during the policy term? </strong></h2>
      <p> Generally, your policy can be cancelled for these reasons: </p>
      <ol>
        <li>Non-payment of premium;</li>
		<li>Material misrepresentation/Fraud;</li>
		<li>Conviction of a crime arising out of acts increasing the hazard insured
          against. (For example, conviction for illegal storage of fireworks);    
        </li><li>Discovery of willful or reckless acts or omissions by the insured
          increasing the hazard insured against. (For example, not getting a
          gas leak fixed);    
        </li><li>Physical changes in the property insured which result in the property
          becoming uninsurable. (For example, should the home become vacant for
          more than 60 consecutive days, a greater exposure to vandalism and
          damage is assumed to exist); and    
        </li><li>A determination by the Commissioner of Insurance that continuation
          of the policy would place the insurance company in violation of the
          law. </li>
      </ol>
      <h2><strong>The food in my freezer went bad because I lost power in my
          home. Does my homeowners policy provide coverage for this?</strong></h2>
      <p> The basic homeowner policy usually does not. However, this is a popular
        coverage for insurance companies to offer and you may be able to buy
        this coverage for a nominal additional premium. There is also the issue
        of where the power was lost. Some policies are limited to coverage for
        electricity lost in the home or where the electricity enters the home.
        Others will limit coverage to within so many yards from the home. Your
        agent should be able to tell you about the availability of coverage and
        how much it would cost.</p>
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